Correlation Between CNH Industrial and Sterling Construction
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Sterling Construction at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CNH Industrial and Sterling Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNH Industrial NV and Sterling Construction, you can compare the effects of market volatilities on CNH Industrial and Sterling Construction and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CNH Industrial with a short position of Sterling Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Sterling Construction.
Diversification Opportunities for CNH Industrial and Sterling Construction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNH and Sterling is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Sterling Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Construction and CNH Industrial is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CNH Industrial NV are associated (or correlated) with Sterling Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Construction has no effect on the direction of CNH Industrial i.e., CNH Industrial and Sterling Construction go up and down completely randomly.
Pair Corralation between CNH Industrial and Sterling Construction
If you would invest 16,435 in Sterling Construction on October 25, 2024 and sell it today you would earn a total of 2,775 from holding Sterling Construction or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.88% |
| Values | Daily Returns |
CNH Industrial NV vs. Sterling Construction
Performance |
| Timeline |
| CNH Industrial NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Sterling Construction |
CNH Industrial and Sterling Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Sterling Construction
The main advantage of trading using opposite CNH Industrial and Sterling Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Sterling Construction can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sterling Construction will offset losses from the drop in Sterling Construction's long position.| CNH Industrial vs. Jacquet Metal Service | CNH Industrial vs. FIREWEED METALS P | CNH Industrial vs. PLAYMATES TOYS | CNH Industrial vs. DAIDO METAL TD |
| Sterling Construction vs. GREENX METALS LTD | Sterling Construction vs. Scientific Games | Sterling Construction vs. Boyd Gaming | Sterling Construction vs. Yuexiu Transport Infrastructure |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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